A new directive from China's Ministry of Industry and Information Technology (MIIT) introduces stricter rules for steel capacity replacement. Under the updated policy, national iron and steel capacity swap ratios must reach at least 1.5:1, though mergers and acquisitions can use a lower ratio of 1.25:1.

To curb independent transfers, the government creates a two-year transition period, after which capacity moves can only happen through genuine corporate restructuring. The policy sets a 24-month validity window for approved swap plans and implements direct restrictions on stainless steel induction furnaces to prevent illegal expansions.

Provincial authorities will now run annual audits to ensure compliance. Additionally, the rules offer favorable swap ratios for low-carbon hydrogen metallurgy, electric furnaces, and specialty steel, backed by coordinated environmental and carbon reviews.